On February 21, 2006, the U.S. Supreme Court issued an opinion in favor of arbitration in Buckeye Check Cashing, Inc. v. Cardegna, et. al., 546 U.S. ____ (2006). In this matter, Respondents Cardegna and Reuter had entered into various deferred-payment loans, or payday loans, with Buckeye Check Cashing ("Buckeye") in which they received cash in exchange for the personal check in the amount of the cash they received plus a finance charge. For each transaction, the parties entered into a Deferred Deposit and Disclosure Agreement ("Agreement") which included an arbitration provision. The arbitration provision also provided that the arbitration "shall be governed by the Federal Arbitration Act (the "FAA")." Respondents brought a putative class action suit in Florida state court, alleging that Buckeye charged usurious interest rates and that the Agreement violated various Florida lending and consumer-protection laws, rendering it criminal on its face. Buckeye moved to compel arbitration and the Florida court denied the motion, holding that a court rather than an arbitrator should resolve a claim that a contract is illegal and void ab initio. The Florida District Court of Appeals for the Fourth District reversed the state court ruling, holding that because the respondents did not challenge the arbitration provision itself, the agreement to arbitrate was enforceable and the question of the contract's legality should go to the arbitrator. The Respondents appealed and the Florida Supreme Court reversed. The U.S. Supreme Court granted certiorari. In a 7-1 decision delivered by Justice Scalia (Justice Alito took no part in this case), the Court challenged to the validity of a contract as a whole, and not specifically to the arbitration clause, must go to the arbitrator. The Court, relying on prior decisions, said that three propositions have been established. First, as a matter of substantive federal arbitration law, an arbitration provision is severable from the remainder of the contract. Second, unless the challenge is to the arbitration clause, the issue of a contract's validity is considered by the arbitrator in the first instance. Third, this arbitration law applies in state as well as federal courts. By applying these propositions, the Court concluded that because Respondents challenged the Agreement, but not specifically the arbitration provision, then the arbitration provision is enforceable apart from the remainder of the contract, and the challenge should therefore be considered by an arbitrator, not a court. Justice Thomas dissented, saying that the FAA does not apply to proceedings in state courts, and the judgement of the Florida Supreme Court should remain undisturbed. Ray